When rivers alters its course, forest loses its density, glacier melts, pests spread and drought hits crops, nature carries the evidence. The scars are etched into the landscapes, but rarely itemised on any balance sheet or financial transactions, because humanity has for centuries viewed nature as something separate from economy – a beautiful backdrop to human progress rather than the very foundation of it.
Forests were cleared for expansion, rivers were polluted in the name of industry, and biodiversity was often treated as an environmental issue rather than an economic one. But what if nature has been quietly powering business success all along?
A growing body of scientific research now confirms that healthy ecosystems are not merely important for survival – they are also essential for economic productivity. They significantly improve business productivity, profits, and long-term economic resilience.
In a groundbreaking study conducted in New Zealand, researchers discovered that businesses operating in areas with richer biodiversity and healthier ecosystems measurably performed better and more productive. The findings offer one of the clearest pieces of evidence yet that protecting nature is not only environmentally wise but economically profitable as well. Nature’s value for businesses, governments, and societies worldwide, changes the conversation entirely.
Nature’s Value for Business as Hidden Economic Engine
Every economy ultimately depends on the natural world. Forests regulate rainfall and purify air. Rivers provide freshwater for agriculture and industries. Healthy soils support food production. Wetlands reduce floods. Pollinators sustain crops. Oceans regulate climate and supply livelihoods for millions. Without functioning ecosystems, businesses face rising costs, declining productivity, increasing environmental risks.
This is how the renowned ecological economist Herman Daly famously said, the economy is “a wholly owned subsidiary of the environment, not the reverse.” Yet despite this reality, nature’s economic contribution is rarely reflected in balance sheets or financial reports. Businesses measure labour, machinery, infrastructure, and investments – but the invisible services provided by ecosystems often remain ignored.
This is partly because nature’s value for business has traditionally been difficult to quantify. However, modern environmental research is beginning to change that.
What the New Zealand Study Found
Researchers examined more than 117,000 business observations across New Zealand spanning between 2009 and 2022. Using detailed environmental and economic datasets, they compared business performance with ecological conditions in different regions. The study measured biodiversity and ecosystem health through indicators such as river health, drought risk, land use, presence of invasive species, and natural habitat quality. Researchers then linked these environmental conditions with company sales, employment and profits.
The results were striking. Businesses located in areas with healthier ecosystems consistently generated stronger financial performance. According to the study, a 1% increase in natural capital was associated with sales around 0.13% higher and profits about 0.15% higher on average.
Why Healthy Ecosystems Improve Business Performance
Nature performs countless economic functions for free. Healthy forests reduce soil erosion and stabilize rainfall patterns. Clean rivers lower water treatment costs. Biodiversity helps control pests naturally. Pollinators support agriculture. Vegetation cools temperatures and improves climate resilience.
When ecosystems degrade, businesses often pay the price indirectly. Crop yields decline. Water shortages intensify. Flood risks increase. Supply chains become vulnerable. Infrastructure faces environmental stress. Insurance costs rise. Public health deteriorates. Nature, in many ways, acts like invisible infrastructure supporting the global economy. This is especially true for industries directly connected to the environment.
Agriculture and Forestry Benefit the Most
The strongest economic effects in the study were found in the agriculture and forestry. Farms and forestry businesses operating in ecologically healthier regions or less intensively developed areas – with lower population density and less infrastructure – showed markedly stronger productivity gains linked to natural capital. In these primary industry areas, a 1% increase in natural capital was associated with sales increases ranging from 0.71% to 0.81% above the economy-wide or national average.
This makes perfect sense, indeed. Healthy soils improve crop growth. Clean water supports irrigation. Native vegetation stabilizes ecosystems. Biodiversity reduces pest outbreaks. They support food and fibre production while lowering costs. Whereas, strong ecosystems also make agricultural systems more resilient to droughts and climate shocks.
For farmers and foresters, nature is not an abstract concept, but the foundation of their livelihoods. Moreover, the benefits were also evident in service industries, construction and retail, although spread more evenly across a broader range of ecological factors.
The Dangerous Trade-Off
The study also revealed an important warning. Areas with greater infrastructure development, commercial activity, roads, and buildings or urban expansion tended to generate higher sales in the short term but showed lower biodiversity scores. In simple terms, businesses may temporarily prosper by degrading nature or declining ecosystems – but may lose some of the productivity benefits healthy ecosystems provide.
These long-term costs eventually emerge through water scarcity, declining productivity, rising disasters, pollution, and climate instability. This is the case with humanity, who spent decades treating nature as expendable capital instead of recognizing it as a productive asset. The consequences are becoming increasingly visible across the world, highlighting a troubling global pattern that economic growth often comes at the expense of ecological health.
When Environmental Policies Improve the Economy
One of the most fascinating aspects of the research involved environmental policy. Researchers examined whether ecological restoration and conservation efforts affected business performance. Two major policy interventions in New Zealand were studied:
One was the Predator Free 2050 programme. The other was a broader package of environmental reforms introduced from 2017, including freshwater protection rules, tree-planting incentives, plastic restrictions, climate legislation, limits on offshore oil and gas exploration, and the Zero Carbon Act.
The findings were remarkable. Following both of these environmental interventions, the positive relationship between ecosystem health and business productivity became even stronger. The productivity gains associated with 1% more natural capital increased business performance by an additional 0.05%, especially during the years immediately after policy implementation.
This suggests that investing in environmental restoration and protection can generate real economic benefits far beyond the environmental sector itself. Therefore, protecting nature is not a financial burden, but an economic growth strategy.
A Global Lesson for the Future
The implications and insights of this research extend far beyond New Zealand. They are important for the growing global effort to better understand the economic value of nature. Countries around the world are facing escalating environmental crises:
- Climate change
- Water shortages
- Biodiversity collapse
- Deforestation
- Soil degradation
- Extreme weather disasters
At the same time, businesses are increasingly vulnerable to environmental disruptions. Global supply chains now depend heavily on stable ecosystems. Investors are beginning to recognize environmental risks as financial risks. New frameworks such as the international Taskforce on Nature-related Financial Disclosures are encouraging businesses to measure their dependence on nature. This shift reflects a deeper truth: economies cannot thrive on a dying planet.
Nature Is Not a Luxury – It Is an Asset
For too long, nature has been treated as scenery rather than infrastructure. Yet forests filter water more efficiently than many treatment plants. Wetlands absorb floods more effectively than concrete barriers. Pollinators sustain food systems worth billions. Healthy ecosystems regulate climate conditions that entire industries depend upon. Nature performs economic work every single day – often without recognition.
The New Zealand research provides measurable evidence that biodiversity and ecosystem health are directly connected to business productivity. This should fundamentally reshape how governments, corporations, and societies think about economic growth. Protecting ecosystems is not simply about saving wildlife or preserving beauty for future generations. It is about safeguarding the very systems that support agriculture, trade, industries, employment, and economic stability itself.
Final Thoughts
The modern economy was built on the assumption that nature’s resources were limitless. Today, science is proving otherwise. Healthy ecosystems are not obstacles to development – they are drivers of long-term prosperity. The future businesses may ultimately succeed not by extracting more from nature, but by learning how to work alongside it sustainably. Because when rivers flow clean, soils remain fertile, forests stand tall, and biodiversity thrives, economies thrive too. Nature, it turns out, has been contributing far more to human prosperity than many ever realized.
